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DEDICATIONS
Dedication is a devotion to whom we love ,who are benefactors , who prays for us and who made us capable of doing all these under this head , there are two Personalities which devoted our report to our are our beloved Parents , our Teachers. So we have PARENTS AND beloved TEACHERS.
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Financial Analysis of D.G Khan Cement Company Ltd.
Sr. No
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Preface
List of Content
Page No.
2 3 45 67 89 911 1118 1826 2734 3542 4247 4753 5373 7475 7677 78
Acknowledgement Introduction of DG Cement Factory Balance Sheet Income Statement Cash Flow Statement Horizontal Analysis of Balance Sheet Vertical Analysis of Balance Sheet Horizontal Analysis of Income Statement Vertical Analysis of Income Statement Horizontal Analysis of Cash Flow Statement Vertical Analysis of Cash Flow Statement Ratio’s Analysis Univariate Model Multivariate Model Conclusion
Preface
As the world is growing rapidly, the businesses are also moving to
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Financial Analysis of D.G Khan Cement Company Ltd.
become the huge one. And by that result, more and more people want to become a master in these businesses. The main purpose in the finance field is to know how the financial analysis is done. We all know that finance is the blood of any business and without it no business can run. Financial analysis of a company is very difficult and the most important task and by doing this I am able to know the whole financial position and financial structure of the company. Simply by looking at how much cash a company has does not provide enough information. The financial statements need to be analyzed to measure a company’s performance and to compare it with other firm’s in the same industry. The resulting information is intended to be useful to owners, potential investors, creditors, analysts, and others as the analysis evaluates the past performance, future potential and financial position of the firm. This report is an analysis of financial statements of D.G. Khan Cement Company Ltd. This report has been prepared with an objective to develop analytical skills required to interpret the information (explicit as well as implicit) provided by the financial statements and to measure the company’s performance during the past few years. The financial statements are analyzed using traditional evaluation techniques such as horizontal analysis, vertical analysis and trend analysis. Ratios are an important tool in analyzing the financial statements & the company’s profitability, solvency & liquidity. Sincere attempts have been made to make this report error free but if any errors and omissions are found then we apologize for that.
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Financial Analysis of D.G Khan Cement Company Ltd.
Acknowledgement
In the name of “Allah”, the most beneficent and merciful who gave us Strength and knowledge to complete this report. This has proved to be a great experience. I would like to express our gratitude to our Finance teacher
Mr.Nadeem Ahmad who gave us this opportunity to fulfill
this report.
DG KHAN CEMENT FACTORY INTRODUCTION
DG Khan Cement Company Limited (DGKC) is producer and seller of ordinary Portland and sulphateresistant cement. The company is a unit of Nishat group, which is a leading and diversified business group with a strong presence in three most important sectors of
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Financial Analysis of D.G Khan Cement Company Ltd.
Pakistan: textiles, cement and financial services. The group also has considerable stake in insurance, power generation, paper products and aviation sectors. It is listed on all the three stock exchanges of the country. DGKC was established in 1978 under the management control of State Cement Corporation of Pakistan Limited (SCCP). The company started its commercial production on April 1986 with 2000 tons per day (TPD) clinker based on dry process technology. In 1992, the company was acquired by the Nishat Group under the privatization programme of the government. Since its privatization, DGKC has undergone intensive capacity expansion. As a result, it is presently the second largest cement producer of the sector. The company had a total installed capacity of 37,156,750 metric tons as at June 2008. DGKC had a market share of 13% in the local cement industry during the first nine months of 2009. DGKC has two plants at Dera Ghazi Khan and a new Greenfield cement plant at Khairpur village, which was started in FY04 and began commercial production in June 2007. The plant has a capacity of 2.1mtpa. Commencement of production at the new plant and effective and efficient operations by the management led to 70% and 66% increase in the volume of clinker and cement production respectively. The company has its own power generation plant along with WAPDA supply. A dualfuel power generation plant at Khairpur cement plant also started its commercial operations successfully in 2008.
BRANDS (PRODUCTS)
Two different products are produced at DGKCC namely Ordinary Portland cement and Sulphate Resistant Cement. These products are marketed through two different brands: D.G Brands & Elephant brand ordinary Portland Cement.(It is also called the OPC and its demands is about 9% because it is commonly used .
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Financial Analysis of D.G Khan Cement Company Ltd.
D.G brand Sulphate Resistant cement ( it is also called the SRC and its demand is about 8% because it is only used in standing the foundation .Its main works is to finish the pours produced while standing the foundation and make building more strong.
D.G cement company limited Balance sheet
2005 2006
Rs.
2007
Rs.
2008
Rs.
2009
Rs.
Asset
Current Asset Store, spare and loose tools Stock intrade Trade debts investments advance, deposits,
Rs.
1,035,081 100,994 76,238 2,769,134 121,486
836,049 226,286 74,165 8,543,763 152,465
1,496,291 295,140 144,245 16,933,790 229,315
2,299,250 445,856 366,173 15,082,582 782,358
2,935,880 899,836 513,966 7,785,968 908,100
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Financial Analysis of D.G Khan Cement Company Ltd.
prepayment and other receviables Cash and bank balances Total current asset Non current assets Property, plant and equipment Asset subject to finance lease Capital work in progress Investments Long term loans, advances and deposits Total non current asset 93,836 4,196,769 77,167 9,909,895 116,173 19,214,954 226,372 19,202,591 243,842 13,287,592
6,637,237 317,262 3,983,175 2,610,634 271,428 13,819,736 18,016,505
7,521,723 295,058 11,759,677 4,482,213 335,810 24,394,481 34,304,376
22,117,551 133,376 1,907,063 8,174,474 196,913 32,529,377 51,744,331
22,977,894 5,135 2,488,307 6,795,961 523,046 32,790,343 51,992,934
24,345,793 0 1,750,208 3,172,508 166,940 29,435,449 42,723,041
Total asset Equity and liabilities
Current liabilities finance under mark up arrangement secured Creditor , accured and other liabilities Derivative forgeign currency forward option Trade and other payables Accured markup Short term borrowing secured Current portion of non current liabilities Provision for taxation Total Current liabilities Non Current Liabilities Long term finances liabilities against assets subject to finance lease Long term deposits Retirement and other benefits Deferred taxation Total non Current liabilities Capital and Liabilities Authorised capital Issued , subscribed and paid up capital Reserves Accumulated Profit / (loss) Share deposit money
960,620 1,154,426 306,048 0 0 0 599,674 35,090 3,055,858
0 0 0 1,406,869 340,757 2,613,695 1,619,025 35,090 6,015,436
0 0 0 1,027,274 342,612 3,942,972 2,042,281 35,090 7,390,229
0 0 0 1,370,336 364,664 7,597,020 2,687,608 35,090 12,054,718
0 0 0 1,435,420 531,772 9,068,575 4,763,942 35,090 15,834,799
4,899,225 131,985 28,674 45,765 537,000 5,642,649
7,372,468 28,886 33,814 26,572 1,559,000 9,020,740
8,686,447 1,141 79,467 39,862 1,624,000 10,430,917
8,411,051 0 73,890 54,018 1,319,000 9,857,959
4,375,837 0 73,765 78,622 1,441,576 5,969,800
3,000,000 1,843,937 7,196,568 277,493
3,000,000 1,843,937 15,085,354 2,330,558 8,351
10,000,000 2,535,412 29,630,084 1,757,689
10,000,000 2,535,412 27,595,698 (50,853)
10,000,000 3,042,494 17,401,220 474,728
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Financial Analysis of D.G Khan Cement Company Ltd.
Total Capital and liabilities
9,317,998
19,268,200
33,923,185
30,080,257
20,918,442
Total Equity and Capital
18,016,505 34,304,376 51,744,331 51,992,934 42,723,041
sales net cost of sales raw and paking materialcunsumed salaries,wages,and other benefits electricity and gas furnace oil /coal stores and spare consumed repair and mentainence insurance depriciation on property plant and equipment other expense C.G.S opening work in process closing workin process 0 cost ofgoods manufavtured opening stock offinishedgoods closing stock of finished goods 0 LESS:own cunsumption capitalised cost of sales grossprofit administrative expense selling and distribution expense other operating expense other operating income impairment on inestment profit from operations finance cost shares of loss of assoiated co. profit/loss before tax taxation profit /loss for year earning/lossper share
2005 5279560 374287 185914 322979 1493514 357762 9997 23642 330100 79153 3177348 210983 (50,205) 160778 3338126 38616 (19,468) 19148 26505 3330769 1948791 (76,480) (60,905) (93,786) 707692 2425312 (304,041) 2121271 (439,193) 1682078 9.12
D.G Cement Income Statement 2006 2007 2008 7,955,665 6419625 12445996 464,080 230,854 470,625 2,114,667 388,113 18,233 20,542 341,940 106,783 4,155,837 50,205 (161,989) (111,784) 4,044,053 19,468 (5,058) 14,410 65,641 3,992,822 3,962,843 121,953 34,352 191,850 294,114 3,908,802 (450,696) (9,573) 3,448,533 (1,030,078 ) 2,418,455 10.37 580717 293929 605335 1902567 383159 22913 21840 469367 105402 4387229 161989 (142,686) 69765 4456994 5058 (69,728) 25370 43984 4387640 2031985 (104,169) (65,122) (139,721) 479420 2202393 (467,759) (14,163) 1720471 (98,000) 1622471 6.43 1381169 478790 1644759 4595975 761950 98482 43082 1346428 183637 10534272 142686 (118,292) 24394 10558666 69728 (78,369) 8641 19302 10530723 1915273 (111,658) (561,465) (581,913) 847344 1507581 (1,749,837) (8,674) (250,930) 197700 (53,230) 0.21
2009 18038209 1527430 641408 1427631 6603908 879772 131911 45573 1354851 196081 12808565 118292 (387,444) 269152 12539413 78369 (249,916) 171547 9387 12358479 5679730 (141,852) (1,871,517) (795,854) 770137 (257,386) 3383258 (2,606,358) 776900 (251,319) 525319 1.96
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Financial Analysis of D.G Khan Cement Company Ltd.
DG.Cement. Cash flow statement. Years. 2005 Cash flow from operating activities. Cash generated from operations. Finance cost paid. Retirement and other benefits paid. Tax paid. Net(decrease)/increase in long term deposits. 2,768,564 (239,581) (1,724) (40,809) (1,691) 4,474,518 (250,029) (7,573) (31,604) 5,140 997,019 (466,185) (43,067) (57,759) 45,653 1,263,660 (1,727,177) (5,054) (135,780) (5,577) 3,829,987 (2,439,250) (6,934) (235,684) (125) Rs. 2006 Rs. 2007 Rs. 2008 Rs. 2009 Rs.
Net cash from operating activities.
2,484,759
4,190,452
475,661
(609,928)
1,147,994
Cash flow from investing activities. Purchase of equipment, plant and property. Purchase of investment. Sale proceeds of investment. Net(increase)/decrease of long term loan,advances and deposits. Sale proceeds of property,plant and equipment. Dividend received. Interest received. (246,407) 4,337 157,005 (64,382) 13,030 265,882 5,094 138,897 18,608 465,779 3,681 (325,502) 26,655 820,435 8,333 356,106 4,076 707,242 42,205 (3,705,612) (193,543) (9,005,201) (167,039) 13,000 (5,095,269) (320,955) 90 (2,698,370) (188,339) (1,995,630) (38,878)
Net cash used in investing activities.
(3,984,220)
(8,939,616)
(4,789,169)
(2,356,788)
(924,879)
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Financial Analysis of D.G Khan Cement Company Ltd.
Cash flow from financing activities. Proceeds from issuance of share capital. Share capital deposit money received. Repayment of non particepatory redeemable capital Proceeds from long term loans. Repayment of long term loans. Repayment of finance lease liabilities. Dividend paid. (199,920) 2,900,000 (471,429) (68,583) (250,705) 4,000,000 (556,883) (96,570) (275,478) 3,332,548 (1,481,302) (85,932) (344,743) 3,000,000 (3,178,083) (19,957) (379,093) 300,000 (2,989,690) (1,141) (533) 1,602,666 8,351 1,014,164
Net cash from/(used in) financing activities.
1,909,363
3,079,420
3,023,237
(577,133)
(1,677,200)
Net increase/(decrease) in cash and cash equivalent. Cash and cash equivalent at the beginning of the year. 409,902 (1,276,686) (1,669,744) (866,784) (1,290,271) (2,536,528) (3,543,849) (3,826,799) (1,454,085) (7,370,648)
Cash and cash equivalent at the end of the year.
(866,784)
(2,536,528)
(3,826,799)
(7,370,648)
(8,824,733)
D.G cement Balance Sheet Horizontal Analysis
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Financial Analysis of D.G Khan Cement Company Ltd.
2005 Current Assets Store, spare and loose tools Stock intrade Trade debts investments advance, deposits, prepayment and other receivables Cash and bank balances Total current asset Non current assets Property, plant and equipment Asset subject to finance lease Capital work in progress Investments Long term loans, advances and deposits Total non current asset 100 100 100 100 100 100 100 100 100 100 % 100 100 100 100
2006 % 81 224 97 309
2007 % 145 292 189 612
2008 % 222 441 480 545
2009 % 284 891 674 281
126 82 236
189 124 458
644 241 458
747 260 317
113 93 295 172 124 177 190
333 42 48 313 73 235 287
346 2 62 260 193 237 289
367 0 44 122 62 213 237
Total asset Equity and liabilities
Current liabilities finance under mark up arrangement secured Creditor , accrued and other liabilities Derivative foreign currency forward option Trade and other payables Accrued markup Short term borrowing  secured Current portion of non current liabilities Provision for taxation Total Current liabilities Non Current Liabilities
100 100 100 0 0 0 100 100 100
0 0 0
0 0 0
0 0 0
0 0 0
270 100 197
341 100 242
448 100 394
794 100 518
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Financial Analysis of D.G Khan Cement Company Ltd.
Long term finances liabilities against assets subject to finance lease Long term deposits Retirement and other benefits Deferred taxation Total non Current liabilities Capital and Equity Authorized capital Issued , subscribed and paid up capital Reserves Accumulated Profit / (loss) Share deposit money Total Capital and Equity
100
150
177
172
89
100 100 100 100 100
22 118 58 290 160
1 277 87 302 185
0 258 118 246 175
0 257 172 268 106
100 100 100 100
100 100 210 840
333 137 412 633
333 137 383 18
333 165 242 171
100 100
207 190
364 287
323 289
224 237
Total Equity and Liabilities
D.G cement Balance Sheet Horizontal Analysis
Current Assets: Store, spare and loose tools:
Since the computed value of Stores, Spares and loose tools under Horizontal Analysis taking year 2005 as a base decrease in 2006. However it shows the last five years is increasing a continuous increase over the years till year 2009. So, the overall tendency of Stores, Spares and loose tools in
Stock intrade:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of Stockintrade under Horizontal Analysis taking year 2005 as a base has been increased significantly over the years till year 2009. So, the overall tendency of Stockintrade in the last five years is increasing.
Trade debts:
Since the computed value of trade debts under Horizontal Analysis taking year 2005 as a base shows a decrease in year 2006 but it is significantly increased in year 2007 to 2009. The overall tendency of trade debts in the last five years is increasing.
Investments:
Since the computed value of Investments under Horizontal Analysis taking year 2005 as a base is showing a significant increase till year 2009. The overall tendency of Investments in the last five years is increasing.
Advance, deposits, prepayment and other receivables:
Since the computed value of Advances, deposits, prepayments and other receivables under Horizontal Analysis taking year 2005 as a base is showing an increasing trend till year 2009, The overall tendency of Advances, deposits, prepayments and other receivables in the last five years is increasing.
Cash and bank balances:
Since the computed value of Cash and bank balances under Horizontal Analysis taking year 2005 as a base is decrease in year 2006. However, it is showing a continuous increase over the years till year 2009 .The overall tendency of Cash and bank balances in the last five years is increasing.
Total current asset:
Since the computed value of Cash and bank balances under Horizontal Analysis taking year 2005 as a base is showing a continuous increase over the years till year 2009 .The overall tendency of Cash and bank balances in the last five years is increasing.
Non current assets: Property, plant and equipment: National University Of Modern Languages Page 13
Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of Property, plant and equipment under Horizontal Analysis taking year 2005 as a base, tends to continuous increase over the years till year 2009.. The overall tendency of Property, plant and equipment in the last five years is increasing.
Asset subject to finance lease:
Since the computed value of Assets subject to finance lease under Horizontal Analysis taking year 2005 as a base, has been significantly decreased over the years till 2008.There is no account in year 2009. The overall tendency of Assets subject to finance lease in the last five years is decreasing.
Capital work in progress:
Since the computed value of Capital work in process under Horizontal Analysis taking year 2005 as a base is increasing in year 2006. However, it is showing decrease till 2009.The overall tendency of Capital work in process in the last five years is fluctuating.
Investments:
Since the computed value of Investments under Horizontal Analysis taking year 2005 as a base is showing continuous increase till year 2009. The overall tendency of Investments in the last five years is increasing.
Long term loans, advances and deposits:
Since the computed value of Long term loans and deposits under Horizontal Analysis taking year 2005 as a base is increasing in year 2006. However, it decreases in year 2007. Long term loans and deposits tends to increase in year 2008 . Moreover, Long term loans and deposits show a decrease in year 2009. The overall tendency of Long term loans and deposits in the last five years is fluctuating.
Total non current asset:
Since the computed value of Total non current assets under Horizontal Analysis taking year 2005 as a base, is showing a continuous increase in year 2007 to 2009. The overall tendency of Total non current assets in the last five years is increasing.
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Financial Analysis of D.G Khan Cement Company Ltd.
Total asset:
Since the computed value of Total assets under Horizontal Analysis taking year 2005 as a base, is showing a continuous increase in year 2007 to 2009. The overall tendency of Total assets in the last five years is increasing.
Equity and liabilities:
Current liabilities: Current portion of non current liabilities:
Since the computed value of Current portion of noncurrent liabilities under Horizontal Analysis taking year 2005 as base is showing significant increase over the years till 2009.The overall tendency of the Current portion of noncurrent liabilities in the last five years is increasing.
Provision for taxation:
Since the computed value of Provision for taxation under Horizontal Analysis taking year 2005 as base is same over the years till 2009.The overall tendency of the Provision for taxation in the last five years is same.
Total Current liabilities:
Since the computed value of total current liabilities under Horizontal Analysis taking year 2005 as base is showing significant increase over the years till 2009.The overall tendency of the total current liabilities in the last five years is increasing.
Non Current Liabilities: Long term finances:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of long term finances under Horizontal Analysis taking year 2005 as base is showing a continuous increase till year 2008.Moreover, long term finances has been significantly decreased in year 2009.The overall tendency of the long term finances in the last five years is fluctuating.
Liabilities against assets subject to finance lease:
Since the computed value of Liabilities against assets subject to finance lease under Horizontal Analysis taking year 2005 as base is showing an in significant decrease in the year 2007. Then there is no account for Liabilities against assets subject to finance lease. The overall tendency of the long term finances in the last five years is decreasing.
Long term deposits:
Since the computed value of long term deposits under Horizontal Analysis taking year 2005 as base is showing an increase in the year 2007 then it decreased in year 2008.Moreover, long term deposits show a slightly decrease in year 2009.The overall tendency of the long term deposits in the last five years is fluctuating.
Retirement and other benefits:
Since the computed value of Retirements and other benefits under Horizontal Analysis taking year 2005 as base is decreasing in 2006 to 2007. However, it is showing an increasing trend over the years till year 2009.The overall tendency of the Retirements and other benefits in the last five years is fluctuating.
Deferred taxation:
Since the computed value of Deferred taxation under Horizontal Analysis taking year 2005 as base is showing an increasing trend till year 2009.The overall tendency of the Deferred taxation in the last five years is increasing.
Total noncurrent liabilities:
Since the computed value of Total noncurrent liabilities under Horizontal Analysis taking year 2005 as base is showing a significant increase over the years till year 2009. The overall tendency of the Total noncurrent liabilities in the last five years is increasing.
Capital and Equity:
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Financial Analysis of D.G Khan Cement Company Ltd.
Authorized capital:
Since the computed value of Authorized capital under Horizontal Analysis taking year 2005 as a base, is same over the years till year 2009.
Issued, subscribed and paid up capital:
Since the computed value Issued, subscribed and paid up capital under Horizontal Analysis taking year 2005 as a base showing an increase in year 2007 and same in year 2008, but it tends to increase in year 2009.. The overall tendency of Issued, subscribed and paid up capital in the last five years is increasing.
Reserves:
Since the computed value Reserves under Horizontal Analysis taking year
2005 as a base is showing a significant increase till year 2009. . The overall tendency of Reserves in the last five years is increasing.
Accumulated Profit / (loss):
100 840 633 18 171
Total Capital and Equity:
Since the computed value of total capital and equity under Horizontal Analysis taking year 2005 is showing a continuous increase in year 2006 to 2009.The overall tendency of total capital and Equity in the last five years is increasing.
Total Equity and Liabilities:
Since the computed value of total liabilities and equity under Horizontal Analysis taking year 2005 is showing a continuous increase in year 2006 to 2009.The overall tendency of total Equity and liabilities in the last five years is increasing.
D.G cement. Balance Sheet. Vertical analysis.
Asset
Percent Current Asset
2005 %
2006 %
2007 %
2008 %
2009 %
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Financial Analysis of D.G Khan Cement Company Ltd.
Store, spare and loose tools Stock intrade Trade debts investments advance, deposits, prepayment and other receviables Cash and bank balances Total current asset Non current assets Property, plant and equipment Asset subject to finance lease Capital work in progress Investments Long term loans, advances and deposits Total non current asset
5.7 0.6 0.4 15.4 0.7
2.4 0.7 0.2 25 0.4
3 0.6 0.3 33 0.4
4.4 0.9 0.7 29 2
7 2.1 1.2 18.2 2.1
0.5 23.3
0.2 28.9
0.2 37.1
0.4 37
0.6 31
36.8 1.8 22.1 14.5 1.5 76.7 100
22 0.9 34.3 13.1 1 71.1 100
42.7 0.3 3.7 15.8 0.4 63 100
44.2 0.01 5 13 1 63 100
57 0 4 7.00E+00 0.4 69 100
Total asset Equity and liabilities
Current liabilities finance under mark up arrangement secured Creditor , accured and other liabilities Derivative forgeign currency forward option Trade and other payables Accured markup Short term borrowing  secured Current portion of non current liabilities Provision for taxation Total Current liabilities Non Current Liabilities Long term finances
5.3 6.4 1.7 0 0 0 3.3 0.2 17
0 0 0 4.1 1 8 5 0.1 18
0 0 0 2 0.7 8 4 0.1 14.3
0 0 0 3 1 15 5 0.1 23
0 0 0 3.4 1.2 21 11 0.1 37
27.2
21.5
16.8
16
10
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Financial Analysis of D.G Khan Cement Company Ltd.
liabilities against assets subject to finance lease Long term deposits Retirement and other benefits Deferred taxation Total non Current liabilities Capital and Equity Authorised capital Issued , subscribed and paid up capital Reserves Accumulated Profit / (loss) Share deposit money Total Capital and Equity
0.7
0.1
0.002
0
0
0.2 0.3 3 31.3
0.1 0.1 5 26.3
0.2 0.1 3 20.2
0.1 0.1 3 19
0.2 0.2 3.4 14
10.2 40 1.5
5.4 44 7 0.02
5 57.3 3.4 0 65.6 100
5 53 0.1 0 58 100
7.1 40.7 1.11 0 49 100
51.7 100
56.2 100
Total Equity and Liabilities
D.G cement Balance Sheet Vertical analysis Current Assets:
Stores, spares and loose tools:
Since the computed value of Stores, Spares and loose tools under vertical Analysis taking total assets as base shows a decrease in year 2006 and there is slightly increase in year
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Financial Analysis of D.G Khan Cement Company Ltd.
2007. However, Stores, Spares and loose tools shows a continuous increase till year 2009. The overall tendency of Stores, Spares and loose tools in the last five years is fluctuating.
Stockintrade:
Since the computed value of stockintrade under vertical Analysis taking total assets as base shows a slightly increase in year 2006 and tend to decrease in year 2007. However, stockintrade shows a continuous increase till year 2009. The overall tendency of stockintrade in the last five years is fluctuating.
Trade debts:
Since the computed value of trade debts under vertical Analysis taking total assets as base shows a decrease in year 2006 and there is slightly increase in year 2007. However, trade debts show a continuous increase till year 2009. The overall tendency of trade debts in the last five years is fluctuating.
Investments:
Since the computed value of Investments under vertical Analysis taking total assets as base shows a continuous increase in year 2006 to 2009. The overall tendency of Investments in the last five years is increasing.
Advances, deposits, prepayments and other receivables:
Since the computed value of Advances, deposits, prepayments and other receivables under vertical Analysis taking total assets as base show a decrease in year 2006 to 2007. However, Advances, deposits, prepayments and other receivables tend to continuous increase in year 2008 to 2009. The overall tendency of Advances, deposits, prepayments and other receivables in the last five years is fluctuating.
Cash and bank balances:
Since the computed value of Cash and bank balances under vertical Analysis taking total assets as base show a decrease in year 2006 to 2007. However, Cash and bank balances tend to continuous increase in year 2008 to 2009. The overall tendency of Cash and bank balances in the last five years is fluctuating.
Total current assets:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of Total current assets under vertical Analysis taking total assets as base has show an continuous increase in year 2006 to 2009. The overall tendency of Total current assets in the last five years is increasing.
Non Current Assets: Property, plant and equipment:
Since the computed value of Property, plant and equipment under vertical Analysis taking total assets as base shows a decrease in year 2006.However, Property, plant and equipment in the last five years is fluctuating. Property, plant and equipment is showing a significantly increase till year 2009. The overall tendency of
Assets subject to finance lease:
Since the computed value of Assets subject to finance lease under vertical Analysis taking total assets as base is showing a continuous decrease over the years till 2008.There is no account in year 2009 the overall tendency of Assets subject to finance lease in the last five years is decreasing.
Capital work in progress:
Since the computed value of Capital work in process under vertical Analysis taking total assets as base is showing an increase in year 2006.However, Capital work in process tends to a significantly decrease in year 2007 . Moreover, It shows an increase in year 2008 then decrease in year 2009.The overall tendency of Capital work in process in the last five years is fluctuating.
Investments:
Since the computed value of Investments under vertical Analysis taking total assets as base is showing a decrease in year 2006.However, Investments tends to increase in year 2007. Moreover, Investments are decreasing in year 2008 to 2009. The overall tendency of Investments in the last five years is fluctuating
Long term loans and deposits:
Since the computed value of Long term loans and deposits under vertical Analysis taking total assets as base tends to decrease in year 2006 to 2009. The overall tendency of Long term loans and deposits in the last five years is fluctuating.
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Financial Analysis of D.G Khan Cement Company Ltd.
Total non current assets:
Since the computed value of Total non current assets under vertical Analysis taking total assets as base tends to decrease in year 2006 to 2008.However, Total non current assets show an increase in year 2009. The overall tendency of Total non current assets in the last five years is fluctuating.
Total Assets:
Since the computed value of Total assets under vertical Analysis taking total assets as base is same over the years till 2009.The overall tendency of Total assets in the last five years is same.
Equity and liabilities
Current Liabilities: Trade and other payables:
Since the computed value of trade and other payables under vertical Analysis taking total liabilities and equity as base is showing increase in year 2006. However, the trade and other payables volume has decrease in year to year 2007. Moreover, the value of trade and other payables increase in 2008 to 2009. The overall tendency of the trade and other payables in the last five years is fluctuating.
Accrued markup:
Since the computed value of accrued markup under vertical Analysis taking total liabilities and equity as base is increasing in year 2006 to 2009. The overall tendency of accrued markup in the last five years is increasing.
Short term borrowing – secured: Since the computed value of accrued markup under
vertical Analysis taking total liabilities and equity as base is showing an increasing trend in year 2006 to year 2009. The overall tendency of accrued markup in the last five years is increasing.
Current portion of non  current liabilities:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of current portion of noncurrent liabilities under vertical Analysis taking total liabilities and equity as base is showing increase in year 2006. However, current portion of noncurrent liabilities has decreased in year 2007 and increased 2008 to 2009. The overall tendency of current portion of noncurrent liabilities in the last five years is fluctuating.
Provision for taxation:
Since the computed value of provision for taxation liabilities under vertical Analysis taking total liabilities and equity as base is show decrease in year 2006 and constant till 2009. The overall tendency of provision for taxation in the last five years is fluctuating.
Total current liabilities:
Since the computed value of total current liabilities under vertical Analysis taking total
liabilities and equity as base is show an increase in year 2006 and decreased in 2007.However it increased in 2008 to 2009. The overall tendency of total current liabilities in the last five years is fluctuating.
Non Current Liabilities
Long term finances:
Since the computed value of non current liabilities under vertical Analysis taking total liabilities and equity as base shows a continuous decrease till 2009. The overall tendency of total current liabilities in the last five years is decreasing
Liabilities against assets subject to finance lease:
Since the computed value of liabilities against assets subject to finance lease under vertical Analysis taking total liabilities and equity as base is show decrease in year 2006 & year 2007 and there is no account for liabilities against assets subject to finance lease in 2008 to 2009.The overall tendency of liabilities against assets subject to finance lease in the last five years is fluctuating
Long term deposits: Since the computed value of long term deposits under vertical Analysis
taking total liabilities and equity as base is show decrease in year 2006 & increase in year 2007 and decreased in year 2008 and then tends to increase in year 2009. The overall tendency of long term deposits in the last five years is fluctuating.
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Financial Analysis of D.G Khan Cement Company Ltd.
Retirement and other benefits:
Since the computed value of retirement and other benefits under vertical Analysis taking total liabilities and equity as base is showing decrease in year 2006. However, retirement and other benefits volume are constant till year 2008 and the slightly increased in 2009. The overall tendency of retirement and other benefits in the last five years is fluctuating.
Deferred taxation:
Since the computed value of deferred taxation under vertical Analysis taking total liabilities and equity as base is showing increase in year 2006. However, deferred taxation volume decreased in year 2007 to 2008 and then tends to increase in 2009. The overall tendency of deferred taxation in the last five years is fluctuating.
Total non current liabilities:
Since the computed value of total non current liabilities under vertical Analysis taking total liabilities and equity as base is show a continuous decrease till year 2009. The overall tendency of total non current liabilities in the last five years is decreasing.
Capital and Equity
Authorized capital: Issued, subscribed and paid up capital:
Since the computed value Issued, subscribed and paid up capital under vertical Analysis taking total liabilities and equity as base has been decrease in year 2006 and has decreased slightly, since year 2007 to 2008. However Issued subscribed and paid up capital show an increase in year 2009. The overall tendency of Issued, subscribed and paid up capital in the last five years is fluctuating
Reserves:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value Reserves under vertical Analysis taking total liabilities and equity as base has been increased since 2006 to 2007 and then tends to decrease in year 2008 to 2009. The overall tendency of Reserves in the last five years is fluctuating.
Accumulated Profit / (loss): Total Equity:
1.5
7
3.4
0.1
1.11
Since the computed value of total equity under vertical Analysis taking total liabilities and equity as base shows an increase in year 2006 to 2007 and it decreased in year 2008 to 2009.The overall tendency of of total equity in the last five years is fluctuating.
Total equity and liabilities:
Since the computed value of total liabilities and equity under vertical Analysis taking total liabilities and equity as base is same over the years till 2009.
D.G Cement Income Statement Horizontal Analysis
Description
Sales Net Cost Of Sales Raw and Packing Material consumed Salaries , Wages, and Other Benefits Electricity and Gas Furnace Oil /Coal
2005 %
100 0 100 100 100 100
2006 %
150.69 0.00 123.99 124.17 145.71 141.59
2007 %
121.59 0.00 155.15 158.10 187.42 127.39
2008 %
235.74 0.00 369.01 257.53 509.25 307.73
2009 %
341.66 0.00 408.09 345.00 442.02 442.17
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Financial Analysis of D.G Khan Cement Company Ltd.
Stores and Spare Consumed Repair and Maintenance Insurance Depreciation On Property Plant and Equipment Other Expense Cost of Good Sold Opening Work In Process Closing Work in Process Total Cost Of goods Manufactured Opening Stock Of finished goods Closing Stock Of Finished Goods Total Less: Own Consumption Capitalized Cost Of Sales Gross Profit Administrative Expense Selling and Distribution Expense Other Operating Expense Other Operating Income Impairment On Investment Profit Operations Finance Cost Shares of Loss of Associated Co. Profit/Loss Before Tax Taxation Profit /Loss For Year Earning/Loss per Share
100 100 100 100 100 100 100 100 100 100 100 100 100 0 100 100 100 100 100 100 0 100 100 0 100 100 100 100
108.48 182.38 86.89 103.59 134.91 130.80 23.80 322.66 69.53 121.15 50.41 25.98 75.26 0.00 119.88 203.35 159.46 56.40 204.56 41.56 0.00 161.17 148.24 0.00 162.57 234.54 143.78 113.71
107.10 229.20 92.38 142.19 133.16 138.08 76.78 284.21 43.39 133.52 13.10 358.17 132.49 0.00 131.73 104.27 136.20 106.92 148.98 67.74 0.00 90.81 153.85 0.00 81.11 22.31 96.46 70.50
212.98 985.12 182.23 407.88 232.00 331.54 67.63 235.62 15.17 316.31 180.57 402.55 45.13 72.82 316.16 98.28 146.00 921.87 620.47 119.73 0.00 62.16 575.53 0.00 11.83 45.01 3.16 2.30
245.91 1319.51 192.76 410.44 247.72 403.12 56.07 771.72 167.41 375.64 202.94 1283.73 895.90 35.42 371.04 291.45 185.48 3072.85 848.59 108.82 0.00 139.50 857.24 0.00 36.62 57.22 31.23 21.49
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Financial Analysis of D.G Khan Cement Company Ltd.
DG Cement Horizontal analysis of Income statement As a base year 2005. Interpretation for Accounts:
Sales:
Since the computed value of sales under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2009 .Moreover, the value of sales increase in year 2009 is quite significant. The overall tendency of the sales in the last five years is increasing.
Cost of Sales: Raw Materials:
Since the computed value of Raw Material under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009.. Moreover, the value of increase in Raw Material in year 2009 is quite significant. The overall tendency of the Raw Material in the last five years is increasing.
Salaries and Wages:
Since the computed value of Salaries and Wages under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009.. Moreover, the value of increase in Salaries and Wages in year 2008 and 2009 is quite significant. The overall tendency of the Salaries and Wages in the last five years is increasing.
Electricity cost
Since the computed value of electricity under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009. However, the electricity volume has
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Financial Analysis of D.G Khan Cement Company Ltd.
shown significant increasing in years 2008. The overall tendency of the electricity in the last five years is increasing.
Furnace oil cost
Since the computed value of furnace oil under Horizontal Analysis taking year 2005 as base is showing increasing {Significantly) in year 2006. However, the cost has shown decreasing trend in years 2007. Moreover, the value of increase in year 2008 and 2009 is quite significant. The overall tendency of the sales in the last five years is increasing.
Store and spare consume:
Since the computed value of store and spare consume under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend in year 2006 to 2009. Moreover, the value of increase in sales in year 2008 and 2009 is quite significant. The overall tendency of the store and spare consume in the last five years is increasing.
Repair and maintenance cost:
Since the computed value of repair and maintenance cost under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009.. Moreover, the value of increase in year 2009 is quite significant. The overall tendency of the repairing and maintenance cost in the last five years is increasing.
Furnace Oil /Coal:
Since the computed value of Furnace oil/coal under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2009. Moreover, the value of increase in year 2009 is quite significant. The overall tendency of the repairing and maintenance cost in the last five years is increasing.
Insurance:
Since the computed value of insurance under Horizontal Analysis taking year 2005 as base is showing decreasing (Significantly) trend in year 2006 and 2007. However, the sales
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Financial Analysis of D.G Khan Cement Company Ltd.
volume has shown increasing trend years subsequent to year 2009. Moreover, the value of increase in insurance in year 2009 is quite significant. The overall tendency of the insurances in the last two years is increasing.
Depreciation on Property, Plant and Equipment:
Since the computed value of depriciati0n on property, plant and equipment under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till 2009 . The overall tendency of the depreciation on lease asset in the last five years is increasing.
Other expenses:
Since the computed value of other expenses under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009.. Moreover, the value is increase in year 2009 is quite significant. The overall tendency of the other expenses in the last five years is increasing.
Opening work in process:
Since the computed value of opening work in process under Horizontal Analysis taking year 2005 as base is showing continuous decrease till 2009. Overall trend of volume is decreasing.
Closing work in process:
Since the computed value of closing work in process under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009. Moreover, the value of increase in sales in year 2009 is quite significant. The overall tendency of the closing work in process in the last five years is increasing.
Cost of goods Manufactured:
Since the computed value of cost of goods manufactured charges under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009. Moreover, the value is increase in year 2009 is quite significant.
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Financial Analysis of D.G Khan Cement Company Ltd.
From the above computation hence it is observed that the value of cost of good sold is increasing by 130.10%, 130.08%, 331.54%, and 403.12% in year 2006,2007,2008,2009 respectively as compared to the base year 2005.
Opening finished goods:
Since the computed value of opening finished goods under Horizontal Analysis taking year 2005 as base is showing decreasing (Significantly) trend till year 2007. However, the sales volume has shown increasing trend years subsequent to year 2009. Moreover, the value of increase in opening finished goods in year 2009is quite significant. The overall tendency of the opening finished goods in the last two years is increasing.
Closing finished goods:
Since the computed value of closing finished goods under Horizontal Analysis taking year 2005 as base is showing decreasing (Significantly) trend in year 2006. However, the closing stock of finished goods has shown increasing trend years subsequent to year 2009. Moreover, the value of increase in year 2009 is quite significant. The overall tendency of the closing finished goods in the last three years is increasing.
Cost of goods sold:
Since the computed value of CGS under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009. Moreover, the value of increase in CGS in year 2009 is quite significant. The overall tendency of the CGS in the last five years is increasing.
Gross profit:
Since the computed value of gross profit under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend in year 2006, 2007 and 2009. However, the gross profit volume has shown decreasing trend in year 2008. Moreover, the value of increase in gross profit in year 2009 is quite significant. The overall tendency of the gross profit is increasing
Operating expenses:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of administrative expenses under Horizontal Analysis taking year 2005 as base is decreasing in year 2006. However, the administrative expenses volume has shown increasing trend till year 2009. Moreover, the value of administrative expenses increase in year 2009 is quite significant. The overall tendency of administrative the in the last five years is increasing.
Selling and distribution expense:
Since the computed value of selling and distribution expense under Horizontal Analysis .taking year 2005 as base is showing decreasing (Significantly) trend in year 2006. However, the volume of selling and distribution has shown increase trend years subsequent to year 2009. Moreover, the value of increase in selling and distribution in year 2009 is quite significant. The overall tendency of the selling and distribution in the last five years is increasing.
Other Operating Expense:
Since the computed value of other operating expenses under Horizontal Analysis taking year 2005 as a base is showing increasing trend till 2009. The overall tendency of other operating expenses in last five year is increasing.
Other Operating Income:
Since the computed value of other operating Income under Horizontal Analysis taking year 2005 as base is showing decreasing (Significantly) trend in year 2006 and 2007. However, the volume of selling and distribution has shown increase trend years subsequent to year 2009. Moreover, the value of other operating income is increase in year 2008 is quite significant. The overall tendency of the operating income in the last five years is fluctuation.
Impairment on Investment:
Since the computed value of impairment on investment under Horizontal Analysis taking year 2005 as base is showing decreasing (Significantly) trend in year 2007 and 2008. However, the volume of impairment on investment has shown increasing trend years 2006 and 2009. The overall tendency of the impairment on investment in the last five years is fluctuation.
Total finance cost:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of total finance cost under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend till year 2009. However, the overall tendency of the total finance cost in the last five years is increasing.
PROFIT BEFOFE TAXATION:
Since the computed value of profit before taxation under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) in year 2006. However, the volume has shown decreasing trend in years subsequent to year 2009. The overall tendency of profit before taxation the in the last three years is decreasing.
TAXATION:
Since the computed value of taxation under Horizontal Analysis taking year 2005 as base is increase in year 2006 and decreasing trend till 2009. The overall tendency of taxation the in the last three years is decreasing.
PROFIT FOR THE YEAR:
Since the computed value of profit for the year under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) in year 2006. However, the volume has shown decreasing trend in years subsequent to year 2009. The overall tendency of profit for the year is decreasing.
Earning/Loss per Share:
Since the computed value of earning/loss per share for the year under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) in year 2006. However, the volume has shown decreasing trend in years subsequent to year 2009. The overall tendency of earning/loss per share for the last three year is decreasing.
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Financial Analysis of D.G Khan Cement Company Ltd.
D.G Cement Income Statement Vertical Analysis Taking sales as base
Description
Sales Net Cost Of Sales Raw and Packing Material Consumed Salaries, Wages, and Other Benefits Electricity and Gas Furnace Oil /Coal Stores and Spare Consumed Repair and Maintenance Insurance Depreciation Equipment Other Expense Cost of good sale Opening Work In Process Closing WorkIn Process 0 Cost Of Goods Manufactured Opening Stock Of Finished Goods Closing Stock Of Finished Goods 0 LESS: Own Consumption Capitalized Cost Of Sales Gross Profit Administrative Expense On Property Plant and
2005 %
100.00 7.09 3.52 6.12 28.29 6.78 0.19 0.45 6.25 1.50 60.18 4.00 (0.95) 3.05 63.23 0.73 (0.37) 0.36 0.50 63.09 36.91 (1.45)
2006 %
100.00 5.83 2.90 5.92 26.58 4.88 0.23 0.26 4.30 1.34 52.24 0.63 (2.04) (1.41) 50.83 0.24 (0.06) 0.18 0.83 50.19 49.81 1.53
2007 %
100.00 9.05 4.58 9.43 29.64 5.97 0.36 0.34 7.31 1.64 68.34 2.52 (2.22) 1.09 69.43 0.08 (1.09) 0.40 0.69 68.35 31.65 (1.62)
2008 %
100.00 11.10 3.85 13.22 36.93 6.12 0.79 0.35 10.82 1.48 84.64 1.15 (0.95) 0.20 84.84 (0.63) 0.07 0.16 84.61 15.39 (0.90)
2009 %
100.00 8.47 3.56 7.91 36.61 4.88 0.73 0.25 7.51 1.09 71.01 0.66 (2.15) 1.49 69.52 0.43 (1.39) 0.95 0.05 68.51 31.49 (0.79)
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Financial Analysis of D.G Khan Cement Company Ltd.
Selling and Distribution Expense Other Operating Expense Other Operating Income Impairment On Investment Profit From Operations Finance Cost Shares Of Loss Of Associated Co. Profit/Loss Before Tax Taxation Profit /Loss For Year Earning/Loss Per Share
(1.15) (1.78) 13.40 45.94 (5.76) 40.18 (8.32) 31.86 0.00
0.43 2.41 3.70 49.13 (5.67) (0.12) 43.35 30.40 0.00
(1.01) (2.18) 7.47 34.31 (7.29) (0.22) 26.80 (1.53) 25.27 0.00
(4.51) (4.68) 6.81 12.11 (14.06) (0.07) (2.02) 1.59 100.00 0.00
(10.38) (4.41) 4.27 (1.43) 18.76 (14.45) 4.31 (1.39) 2.91 0.00
VERTICLE ANALYSIS
SALES:
Since the computed value of sales under vertical Analysis taking net sales as base is showing similar trend over the years.
Cost of Sales
Raw Materials:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of Raw Material under vertical Analysis taking net sales as base is showing decrease in 2006 However, there is significant increase in Raw Materials in 2007, 2008 & 2009. The overall tendency of the Raw Material in the last five years is fluctuating.
Salaries and Wages:
Since the computed value of Salaries and Wages under vertical Analysis taking net sales as base is showing decrease trend in 2006. However, the Salaries and Wages volume has shown increasing trend in year 2007 & 2008. Moreover, the value of Salaries and Wages decrease in year 2009. The overall tendency of the Salaries and Wages in the last five years is fluctuating.
Electricity cost
Since the computed value of electricity under vertical Analysis taking net sales as base is showing a decrease in year 2006. However, the electricity volume has shown increase in years 2007 to 2008.While it decrease in 2009.The overall tendency of the electricity in the last five years is fluctuating.
Furnace oil cost
Since the computed value of furnace oil under vertical Analysis taking net sales as base is showing a decrease in year 2006. However, the electricity volume has shown a continuous increase in years 2007 to 2008, but it shows a slightly decrease in year 2009.The overall tendency of the sales in the last five years is fluctuating.
Store and spare consume:
Since the computed value of store and spare consume under vertical Analysis taking net sales as base is showing a decrease in year 2006. However, the store and spare consume has shown a continuous increase in years 2007 to 2008, but it shows a decrease in year 2009.The overall tendency of the store and spare consume in the last five years is fluctuating.
Repair and maintenance cost:
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of repair and maintenance cost under vertical Analysis taking net sales as base is showing an increase in year 2006 to 2009. The overall tendency of the repairing and maintenance cost in the last five years is increasing.
Insurance:
Since the computed value of insurance under vertical Analysis taking net sales as base is showing decrease in year 2006. However, the Insurance tends to increase in year2007 and it also shows a slightly increase in year 2008. Moreover, the value of insurance in year 2009 is decreased. The overall tendency of the insurances in the last five years is fluctuating.
Depreciation on leased assets:
Since the computed value of depriciati0n on lease asset under vertical Analysis taking net sales as base is showing a decrease in year 2006, but the depreciation on lease asset volume has shown a slightly increase in year 2007. Moreover, the value of Depreciation on leased assets has shown a continuous increase in years 2008 to 2009. The overall tendency of the depreciation on lease asset in the last five years is fluctuating.
Other expenses:
Since the computed value of other expenses under vertical Analysis taking net sales as base is showing a decrease in year 2006. Then the value of other expenses shows an increase in year 2007. However, it shows a continuous decrease in the years 2008 to 2009. The overall tendency of the other expenses in the last five years is fluctuating.
Opening work in process:
Since the computed value of opening work in process under vertical Analysis taking net sales base is showing a decrease in year 2006 to 2009. The overall tendency of Opening work in process in the last five years is decreasing.
Closing work in process:
Since the computed value of closing work in process under vertical Analysis taking net sales as base is showing an increase in the years 2006 to 2007. Then the value of closing work in
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Financial Analysis of D.G Khan Cement Company Ltd.
process tends to decrease in year 2008. However, it shows an increase in year 2009.The overall tendency of the closing work in process in the last five years is fluctuating.
Cost of goods Manufactured:
Since the computed value of cost of goods manufactured charges under vertical Analysis taking net sales as base is showing a decrease in year 2006.Then the value of cost of goods manufactured is showing an increasing trend in year 2007 to 2009. The overall tendency of the cost of goods manufactured in the last five years is fluctuating.
Opening finished goods:
Since the computed value of opening finished goods under vertical Analysis taking net Sales as base are showing a decreasing trend in years 2006 to 2009. The overall Tendency of the opening finished goods in the last five years is decreasing.
Closing finished goods:
Since the computed value of closing finished goods under vertical Analysis taking net sales as base is showing a decrease in year 2006. However, the closing stock of finished goods has shown an increase in year 2007, but it tends to decrease in year 2008.Moreover, the value closing stock of finished goods is increased in year 2009. The overall tendency of the closing stock of finished goods in the last five years is fluctuating.
Overhead Cost:
Since the computed value of overhead cost under vertical Analysis taking net sales as base is showing decrease (Significantly) trend in year 2006. However, the overhead cost has shown increasing trend years subsequent to year 2008. Moreover, the value of over head cost decrease in year 2009 is quite significant. The overall tendency of the sales in the last five years is fluctuating
Cost of goods sold:
Since the computed value of cost of goods sold under vertical Analysis taking net sales as base is showing decrease in year 2006. However, the cost of goods sold volume has shown increasing trend in year 2007 to year 2009. The overall tendency of the cost of goods sold in the last five years is fluctuating.
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Financial Analysis of D.G Khan Cement Company Ltd.
Since the computed value of gross profit under vertical Analysis taking net sales as base is showing increase in year 2006. However, the gross profit has shown decreasing trend in year 2007 & 2009. The overall tendency of the gross profit in the last five years is fluctuating.
Administrative Expense:
Since the computed value of Administrative Expense under vertical Analysis taking net sales as base is showing increase in year 2006 & 2007. However, the Administrative Expense has shown decreasing trend in year 2008 & 2009. The overall tendency of the administrative expense in the last five years is fluctuating
Selling and distribution expenses:
Since the computed value of Selling and distribution expenses under vertical Analysis taking net sales as base is showing decrease in year 2006 and 2007. Moreover, the value of Selling and distribution expenses has significant increase in year 2008 & 2009. The overall tendency of the Selling and distribution expenses in the last five years is fluctuating. OTHER OPERATING EXPENSE: Since the computed value of OTHER OPERATING Expense under vertical Analysis taking net sales as base is showing increase in year 2006. However, the OTHER OPERATING EXPENSE has shown slightly decrease trend in year 2007. Moreover, the value of OTHER OPERATING EXPENSE has increase in year 2008 but a slightly decrease in year 2009. The overall tendency of the other operating expense in the last five years is fluctuating.
OTHER OPERATING INCOME: Since the computed value of other operating income under vertical Analysis taking net sales as base is showing significantly decrease in year 2006. However, the other operating income has shown increasing trend in year 2007. Moreover, the value of other operating income has decrease in year 2008 & 2009. The overall tendency of the other operating income in the last five years is fluctuating.
Impairment on investment:
Taking net sales as a base year there is no expense on impairment on investment in any year except in year 2009
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Financial Analysis of D.G Khan Cement Company Ltd.
Profit from operations:
Since the computed value of profit from operations under vertical Analysis taking net sales as base is showing decrease in year2006 to 2009. The overall tendency of the profit from operations in the last five years is decreasing.
Finance Cost:
Since the computed value of finance cost under vertical Analysis taking net sales as base is showing slightly decrease in year 2006. However, the finance cost has shown continuous increase till 2009. The overall tendency of the finance cost in the last three years is increasing.
Share of loss of associated companies:
Since the computed value of share of loss of associated companies under vertical Analysis taking net sales as base is showing increase in year 2006 & 2007. However, the share of loss of associated companies has shown decrease in 2008. The overall tendency of the share of loss of associated companies in the last five years is fluctuating.
Profit/loss before tax:
Since the computed value of profit/ loss before tax under vertical Analysis taking net sales as base is showing increase in year 2006. However, it has shown decreasing trend in 2007 to 2009. The overall tendency of profit/ loss before tax in the last five years is fluctuating.
Taxation:
Since the computed value of taxation under vertical Analysis taking net sales as base is showing negatively decreasing in year 2006 & 2007. However, the taxation has shown positive increase in 2008 and negatively decreases in 2009. The overall tendency of the taxation in the last five years is fluctuating.
Profit for the year:
Since the computed value of profit for the year under vertical Analysis taking net sales as base is show decreasing in year 2006 & 2007. However, the profit for the year has shown
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Financial Analysis of D.G Khan Cement Company Ltd.
increase in 2008. Moreover it show decrease in 2009. The overall tendency of the profit for the year in the last five years is fluctuating.
DG cement.
Cash Flow statement. Horizontal Analysis. Years. 2006 2007 2008 % % %
2005 % Cash flow from operating activities. Cash generated from operations. Finance cost paid. Retirement and other benefits paid. Tax paid. Net(decrease)/increase in long term deposits. Net cash from operating activities. 100 100 100 100 100 100
2009 %
161.6 104.3 439.2 77.44 303.9
36.01 194.58 2498.0 141.53 2699.7
45.64 720.9 293.1 332.7 329.8
138.34 1018.1 402.20 577.53 7.39
168.6
19.14
24.55
46.20
Cash flow from investing activities. Purchase of equipment, plant and property. Purchase of investment. Sale proceeds of investment. Net(increase)/decrease of long term loan,advances and deposits. Sale proceeds of property,plant and equipment. Dividend received. Interest received. Net cash used in investing activities. 100 100 100 100 100 100 100 100 243.0 86.31 26.13 300.4 169.3 137.50 165.83 56.37 429.05 296.67 72.82 97.31 132.1 614.6 522.5 53.85 20.09 144.52 93.98 450.46
224.3
120.20
59.15
23.21
Cash flow from financing activities. Proceeds from issuance of share capital. Share capital deposit money received. Repayment of non particepatory redeemable capital Proceeds from long term loans. Repayment of long term loans. Repayment of finance lease liabilities. Dividend paid. Net cash from/(used in) financing activities. 100 100 100 100 100 100 100 100 0 137.9 118.1 140.8 109.8
0 114.92 314.22 125.30 137.51
0 103.4 674.1 29.10 151.2
0 10.34 634.18 1.66 0.21
161.2
158.34
30.23
87.84
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Financial Analysis of D.G Khan Cement Company Ltd.
Net increase/(decrease) in cash and cash equivalent. Cash and cash equivalent at the beginning of the year. Cash and cash equivalent at the end of the year.
100 100
407.3 67.89
314.78 198.68
864.5 299.7
354.74 577.33
100
292.6
441.49
850.3
1018.1
DG Cement, Horizontal analysis of cash flow statement: Cash flow from operating activates
Cash flow from operation:
Since the computed value of cash flow from operation under Horizontal Analysis taking year 2005 as base is showing increasing trend in year 2006. However, the cash flow from operation volume has shown decreasing trend in years subsequent to year 2007 and 2008. Moreover, the value of cash flows from operation is increase in year 2009. The overall tendency of the cash flow from operation in the last five years is flu
Finance cost paid:
Since the computed value of finance cost paid under Horizontal Analysis taking year 2005 as base is showing increasing trend up till 2009. So, the over all tendency of finance cost paid is increasing.
Retirement and other benefits paid:
Since the computed value of retirement and other benefits paid under Horizontal Analysis taking year 2005 as base has shown increasing trend in years subsequent to year 2009.
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Financial Analysis of D.G Khan Cement Company Ltd.
Moreover, the value of increase in taxes paid in year 2006 is quite significant. The overall tendency of the taxes paid in the last five years is increasing.
Taxes paid:
Since the computed value of taxes paid under Horizontal Analysis taking year 2005 as base is showing decreasing trend in year 2006. However, the cash flow from operation volume has shown increasing trend in years subsequent to year 2009. Moreover, the value of increase in taxes paid in year 2009 is quite significant. The overall tendency of the taxes paid in the last five years is increasing.
Net cash from operating activities:
Since the computed value of net cash flow from operating activities under Horizontal Analysis taking year 2005 as base is showing decreasing trend till year 2007. However, the net cash flow from operating activities volume has shown increasing trend in years subsequent to year 2008. Moreover, the value of decrease in net cash flows from operating activities in year 2009. The overall tendency of the net cash flow from operating activities in the last five years is fluctuating.
Cash flows from investing activities:
Purchase of property, plant and equipment:
Since the computed value of Purchase of property, plant and equipment under Horizontal Analysis taking year 2005 as base is showing increasing (Significantly) trend in year 2007. However, the purchase of property, plant and equipment volume has shown decreasing trend in years subsequent to year 2009. Moreover, the value of increase in purchase of property, plant and equipment in year 2006 is quite significant. The overall tendency of the purchase of property, plant and equipment in the last five years is decreasing.
Purchase of investments:
Since the computed value of purchase of investment under Horizontal Analysis taking year 2005 as base is showing decreasing trend till year 2006. However, the purchase of investment volume has shown increasing trend in years subsequent to year 2007. Moreover,
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Financial Analysis of D.G Khan Cement Company Ltd.
the value of decrease in purchase of investment activities to year 2009 is quite significant. The overall tendency of the purchase of investment in the last five years is fluctuating.
Net (increase)/decrease of long term loan, advances and deposits:
Since the computed value of net long term loan, advances and deposits under Horizontal Analysis taking year 2005 as base is showing decreasing trend till 2007.. Moreover, the value of net long term loan, advances and deposits is increase year 2008. It again decreases in 2009. The overall tendency of the finance cost in the last five years is fluctuating.
Sale proceeds of property, plant and equipment:
Since the computed value of sale proceeds of property, plant and equipment under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2008. Moreover, the value of sale proceeds of property, plant and equipment is decrease in year 2009. The overall tendency of the finance cost in the last five years is fluctuating.
Dividend received:
Since the computed value of dividend received under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2009. Moreover, the value of increase in finance cost in year 2009 is quite significant. The overall tendency of the finance cost in the last five years is increasing.
Precedes from long term loans:
Since the computed value of proceed from long term loans under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2008. Moreover, the value of proceed from long term loans is decrease in year 2009. The overall tendency of the finance cost in the last five years is fluctuating.
Repayment of long term loans:
Since the computed value of repayment of long term loans under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2009. Moreover, the value of repayment of long term loans increase in year 2008 is quite significant. The overall tendency of the finance cost in the last five years is increasing.
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Repayment of finance lease liabilities:
Since the computed value of repayment of finance lease liabilities under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2007. However, the value of repayment of finance lease liabilities decrease till 2009. The overall tendency of the finance cost in the last five years is fluctuating.
Dividend paid:
From the above computation hence it can be observed that the value of dividend paid is increases 137.5094234%, 151.2107856% afterward it decrease 0.212600467% as compared to the base year 2005.
Net increase/ (decrease) in cash and cash equivalent:
Since the computed value of net cash and cash equivalent under Horizontal Analysis taking year 2005 as base is showing decreasing trend till year 2009. The overall tendency of the finance cost in the last five years is decreasing.
Cash and cash equivalent at the beginning of the year:
Since the computed value of cash and cash equivalent under Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2009. Moreover, the value of increase in finance cost in year 2009 is quite significant. The overall tendency of the finance cost in the last five years is increasing.
DG. Cement. Cash flow statement. Vertical analysis. Years.
Cash flow from operating activities. Cash generated from operations. Finance cost paid. Retirement and other benefits paid. Tax paid. 2005 % 319 27.64 0.20 4.71 2006 % 176 9.86 0.30 1.25 2007 % 26 12.18 1.13 1.51 2008 % 17 23.4 0.07 1.84 2009 % 43.4 27.6 0.08 2.67
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Net(decrease)/increase in long term deposits. Net cash from operating activities.
0.20 286
0.20 165
1.19 12
0.08 8.28
0.00 13.0
Cash flow from investing activities. Purchase of equipment, plant and property. Purchase of investment. Sale proceeds of investment. Net(increase)/decrease of long term loan,advances and deposits. Sale proceeds of property,plant and equipment. Dividend received. Interest received. Net cash used in investing activities. 427.5 22.33 0.00 28.43 0.50 18.11 0.00 459 355.0 6.59 0.51 2.54 0.51 10.48 0.20 352 133.1 8.39 0.00 3.63 0.49 12.1 0.10 125 36.6 2.56 0.00 4.42 0.36 11.1 0.11 31 22.6 0.44 0.00 4.04 0.05 8.01 0.48 10
Cash flow from financing activities. Proceeds from issuance of share capital. Share capital deposit money received. Repayment of non particepatory redeemable capital Proceeds from long term loans. Repayment of long term loans. Repayment of finance lease liabilities. Dividend paid. Net cash from/(used in) financing activities. 0 0 23.06 334 54.39 7.91 28.92 220 0 0.33 0.00 157 21.95 3.81 10.86 121 41.8 0.00 0.00 87.0 38.7 2.25 9.01 79.0 0 0 0 40.7 43.1 0.27 5.14 7.83 11.4 0.00 0.00 3.40 33.8 0.01 0.01 19.0
Net increase/(decrease) in cash and cash equivalent. Cash and cash equivalent at the beginning of the year. Cash and cash equivalent at the end of the year.
47.2 147.2 100
65.83 34.17 100
33.72 66.28 100
48.08 51.92 100
16.48 83.52 100
DG. Cement. Cash flow statement vertical analysis Years 2005 to2009 Cash flow from operating activities
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Cash flows from operations:
Since the computed value of Cash flows from operations under vertical Analysis taking Net cash as base shows a significant decrease in year 2006 and also in 2007, and also it shows an increasing trend in year 2008 and 2009. The overall tendency of Cash flows from operations in the last five years shows fluctuating.
Finance cost paid:
Since the computed value of Finance cost paid under vertical Analysis taking Net cash as base is showing an decrease in year 2006 again increase in 2007 subsequent years till 2009. The overall tendency of Finance cost paid in the last five years is fluctuating.
Retirement and other benefits paid:
Since the computed value of Retirement and other benefits under vertical Analysis taking Net cash as base are slightly increased in year 2006.It also shows an decreasing trend in year 2007.Then it tends to increase in 2008.However, it tends to increase in a little bit trend. The overall tendency of Retirement and other benefits in the last five years is fluctuating.
Taxes paid:
Since the computed value of taxes paid under vertical Analysis taking Net cash as base are decreased in years 2006,then it shows an increasing trend till 2009. The overall tendency of taxes paid in the last five years is fluctuating.
Net (decrease)/increase in long term deposits:
Since the computed value of Net (decrease)/increase in long term deposits under vertical Analysis taking Net cash as base shows a slightly increase in year 2005. It also shows a decreasing trend in year 2006 to 2007. Then it tends to increased in year 2009. The overall tendency of Net (decrease)/increase in long term in the last five years are fluctuating
Net cash from operating activities:
Since the computed value of Net cash from operating activities under vertical Analysis taking Net cash as base, shows a significant decreasing trend in 2005 to 2007. Then it show increasing in year 2008. However, it shows decrease in year 2009. The overall tendency of Net cash from operating activities in the last five years is fluctuating.
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Cash flows from investing activities
Purchase of property, plant and equipment:
Since the computed value of Purchase of Property, Plant and Equipment under vertical Analysis taking Net cash as base, shows a increasing trend in 2005 to 2007. Then it shows a significant decrease trend in year 2008 to 2009. The overall tendency of Purchase of Property, Plant and Equipment in the last five years is fluctuating.
Purchase of investments:
Since the computed value of Purchase of Investment under vertical Analysis taking Net cash as base, shows a significant decrease in year 2006 and then tends to increase in 2007.However, it tends to decrease in year 2008 to 2009.The overall tendency of Purchase of Investment in the last five years is fluctuating.
Sale proceeds of investments:
Since the computed value of Sale proceeds of investments under vertical Analysis taking Net cash as base, shows a decrease in year 2006 .As there is no account of Sale proceeds of investments in year 2008 to 2009.The overall tendency of Sale proceeds of investments in the last five years is decreasing.
Net (increase)/decrease in long term loans and deposits:
Since the computed value of Net (increase)/decrease in long term loans and deposits under vertical Analysis taking Net cash as base, shows a significant decrease in year 2006 and then tends to decrease in year 2007 while increase in year 2008.Moreover, it shows a decrease in year 2009.The overall tendency of Net (increase)/decrease in long term loans and deposits in the last five years is fluctuating.
Sales proceeds of property, plant and equipment:
Since the computed value of Sales proceeds of property, plant and equipment under vertical Analysis taking Net cash as base, shows a continuous decrease in year 2006 to 2009.The overall tendency of Sales proceeds of property, plant and equipment in the last five years is fluctuating.
Dividend received:
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Since the computed value of Dividend received under vertical Analysis taking Net cash as base, shows a continuous decrease in year 2006 to 2009.The overall tendency of Dividend received in the last five years is decreasing.
Interest received:
Since the computed value of Interest received under vertical Analysis taking Net cash as base, as there is no account of Interest received in year 2005 but it sows a decrease in year 2007 to 2009.The overall tendency of Interest received in the last five years is decreasing.
Net cash used in investing activities:
Since the computed value of Net cash used in investing activities under vertical Analysis taking Net cash as base is showing a significant decrease in subsequent years till 2009.So,the overall tendency of Interest received in the last five years is decreasing.
Cash flows from financing activities
Repayment of nonparticipatory redeemable capital:
As there is no account of Repayment of nonparticipatory redeemable capital except year 2005.So there is no interpretation.
Proceeds from issuance of share capital:
Since the computed value of Proceeds from issuance of share capital under vertical Analysis taking Net cash as base, has no account in years 2005 to 2006, but it has the account in years2007&2009. It shows a decreasing trend. The overall tendency of Interest received in the last five years is decreasing.
Share capital deposit money received:
As there is no account of share capital deposit money received, so there is no interpretation for it.
Proceeds from long term loans:
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Since the computed value of Proceeds from long term loans under vertical Analysis taking Net cash as base is showing a significant decrease over the years till 2009.So, the overall tendency of Proceeds from long term loans received in the last five years is decreasing;
Repayment of long term loans:
Since the computed value of Repayment of long term loans under vertical Analysis taking Net cash as base is showing a decrease in year 2006.It tends to increase in year 2007 and 2008. Then it shows decrease in year 2009.The overall tendency of Repayment of long term loans received in the last five years is fluctuating
Repayment of finance lease liabilities:
Since the computed value of Repayment of finance lease liabilities under vertical Analysis taking Net cash as base is showing a continuous decrease over the years till year 2009. The overall tendency of Repayment of finance lease liabilities received in the last five years is decreasing.
Dividend paid:
Since the computed value of Dividend paid under vertical Analysis taking Net cash as base is showing a continuous decrease over the years till year 2009. The overall tendency of Dividend paid received in the last five years is decreasing.
Net cash from/ (used in) financing activities:
Since the computed value of Net cash from/ (used in) financing activities under vertical Analysis taking Net cash as base is showing a significant decrease in the years 2006 and 2007. Then it tends to increase in years 2008 and 2009.The overall tendency of Net cash from/ (used in) financing activities received in the last five years is fluctuating.
Net increase/ (decrease) in cash and cash equivalents:
Since the computed value of Net increase/ (decrease) in cash equivalents under vertical Analysis taking Net cash as base is showing an increase in the year 2006. Then it decreased in year 2007.It tends to increase in year 2008. Then it is decreased in year 2009.The overall tendency of Net increase/(decrease) in cash equivalents received in the last five years is fluctuating.
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Cash and cash equivalents at the beginning of year:
Since the computed value of Cash and cash equivalents at the beginning of the year under vertical Analysis taking Net cash as base is showing a significant decrease in the year 2006. Then it is increased in year 2007.it shows a decrease in year 2008. Moreover it tends to increase in year 2009.The overall tendency of Cash and cash equivalents at the beginning of the year received in the last five years is fluctuating.
Cash and cash equivalents at the end of year:
Since the computed value of Cash and cash equivalents at the end of the year under vertical Analysis taking Net cash as base is same over the years till 2009. The overall tendency of Cash and cash equivalents at the end of the year received in the last five years is constant.
Repayment of long term loans:
Since the computed value of Proceeds from long term loans under vertical Analysis taking Net cash as base is showing a significant decrease over the years till 2009.So, the overall tendency of Interest received in the last five years is decreasing. 1. Current Ratio’s
1. Current Ratio's Formula. Items Current ratio. Current Ratio=Current Assets/current liabilities Years 2005 1.373352
2006 1.647411
2007 2.6000485
2008 1.5929523
2009 0.8391387
C retr to u n a . r i
3 2 . 5 2 1 . 5 1 0 . 5 0 20 05 20 06 20 07 20 08 20 09 Cretr to u n ai . r
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Financial Analysis of D.G Khan Cement Company Ltd.
The current ratio is the ratio of total current assets and total current liabilities. The current ratio of a firm measures its shortterm solvency, i.e. its ability to meet shortterm obligations. As a measure of short term/current financial liquidity, it indicates the rupees of current assets available for each rupee of current liability / obligation. The higher the current ratio, the large the amount of rupees available per rupee of current liability, the more the firm’s ability to meet current obligations and the greater the safety of funds of short term creditors. The standard for current ratio is 2:1.As shown above this ratio is more then one for first two years which is satisfactory. This ratio was 1.3733 in 2005 and increase to 1.647 in 2006 and 2.600 in 2007 but in 2008 it is decreased by1.592and in 2009 the ratio decreases to 0.839 which shows Company’s ability to meet shortterm obligations has reduced.
Quick ratio:
2. Quick Ratio's Formula. Item Quick Ratio Quick Ratio= {current assets(inventory + prepaid expenses)} /current liabilities. Years 2005 0.94
2006 1.47
2007 2.32
2008 1.35
2009 0.58
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Qc R i u k ao i t
2 . 5 2 1 . 5 1 0 . 5 0 20 05 20 06 20 07 20 08 20 09 Qc uk i Rt ao i
Interpretation: The term current asset refers to the assets which can be converted into cash immediately. Thus, the quick ratio = current assets–(inventory + prepaid expense)/current liabilities. This ratio is used to check that how much inventory is unsold and includes in current assets. Because current assets may include inventory in large amount which would increase the current assets. from the above computation it is observed that the value of quick ratio is 0.94 in year 2005 while it has increased in the next two years by 1.47 and 2.32 in years 2006 and 2007 respectively.whlie it is observed that it has again decreased to 1.35 and 0.58 in year 2008 and 2009 respectively.
Net working Capital:
3. Net working capital.
Formula
Net working capital=current assetscurrent liabilities. Years 2005 1,140,911
Item Net working Capital.
2006 3,894,459
2007 11,824,725
2008 7,147,873
2009 2,547,207
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N t w r in ca it l. e ok g p a
1000 5000 1000 0000 5000 000 0 5 0 0 0 000 20 20 20 20 20 05 06 07 08 09 N t w rkin e o g ca ita p l.
Interpretation: Working capital indicates the short run solvency position of the business. As from the above computation it is observed that the net working capital is 1140911 in year 2005 while it has increased by 3894459, 11824725 in years 2006 and 2007 respectively. while it has decreased by 7147873 in year 2008 and it has shown a negative trend in year 2009.which shows that the company’s current liabilities has increased and it reflect that the company is unable to fulfill it financial requirements.
Solvency ratios: Debt Ratio:
4. Debt Ratios Formula. Items Debts Ratio. Debts ratio= Total liabilities / Total Assets. Years. 2005 2006 2007 2008 0.48280768 0.4383166 0.3444077 0.4214549
2009 0.51037095
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D t Rt . e s ao b i
0 . 6 0 . 5 0 . 4 0 . 3 0 . 2 0 . 1 0 20 05 20 06 20 07 20 08 20 09 D t Rto es a . b i
Interpretation: Debit ratio is calculated to check the total asset financed by the firm creditors. It helps to determine how well creditors are protected in case of insolvency. This ratio shows relation between total assets and total liabilities. From the above computation hence it is observed that This ratio has shown a decreasing trend in year 2006 and 2007 when compared to year 2005 while it has shown an increasing trend in years 2008 and 2009.
Debt equity Ratio:
5. Debtequity ratios Formula Items. Debtequity ratio. Debtequity ratio=Long term debt/total capitalization. Years. 2005 2006 2007 2008 2009 0.37716611 0.3188787 0.2351737 0.24683023 0.2220227
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Debtequity ratio.
0.4 0.3 0.2 0.1 0 2005 2006 2007 2008 2009 Debtequity ratio.
Interpretation: The debt equity ratio indicates the relationship between the longterm funds provided by creditors and those provided by the firm’s owners. The standard debt equity ratio is 60:40. From the above graph hence it is observed that the value of debt equity ratio shows a decreasing trend in years 2006,2007,2008,2009.
Time interest earned ratio:
6. Timeinterest earned ratio. Formula Items. Timeinterestearned ratio Timeinterest earned ratio=EBIT / Interest Years. 2005 2006 2007 2008 7.97692416 8.6728127 4.7083926 0.8615551
2009 1.29807878
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Timeinterestearned ratio
10 8 6 4 2 0 2005 2006 2007 2008 2009 Timeinterestearned ratio
Interpretation: This ratio is calculated to know about long term solvency position of the business. This ratio indicates the company’s ability to pay interest. From the above computation it is observed that the ratio has shown an increasing trend in year 2005 and 2006 while it has decreased in year 2007 and 2008 which shows that the company has not utilized its capital efficiently. While it has again shown an increasing trend in year 2009.
Activity Ratios:
Account receivable turn over ratio:
7. Accounts Receivable turnover Formula Accounts receivable Years. 2005 69.25103 2006 107.2698 2007 44.505009 2008 33.9893875 2009 35.0961134 Receivable turnover=Annual sale/Average account
Item. A/R. turnover.
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A .t r o e . /R u n v r
10 5 10 0 5 0 0 20 05 20 06 20 07 20 08 20 09 A/R.tu ov rn er.
Interpretation: This ratio shows the proportion of sales to receivable. It means that how many times in a year our receivables are collected. It shows the management of the company that how much they are efficient to collect the receivables. From the above graph it is observed that the ratio has increased in 2005 and 2006 while it has shown a decreasing trend in the next three years which reflect that the company’s management was unable to collect the receivables in the last three years.
Average collection period:
8. Average collection period. Formula. Items. Avg. period collection Average collection period=No. of days in a year/Account Receivable turnover. Years. 2005 5.2 0
2006 3.36
2007 8.0 9
2008 10.5 9
2009 10.2 6
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Av colle ion p riod g. ct e
15 10 5 0 2 005 20 06 2 07 0 20 08 2 9 00 Av collection period g.
Interpretation: This ratio indicates that in how many days’ receivables are collected. The smaller the answer is the better it is for the firm. So, from the above computation it is observed that the average collection period is less in first two years which is good for the firm but it has shown increasing trend in the next three years in 2007, 2008, 2009 respectively. This shows that collection management is inefficient.
Accounts payable turnover:
12. Account Payable turnover. Formula. Item. Account payable turnover 0 2.84 4.27 7.68 8.61 Account Payable turnover=Annual credit Purchase or CGS/ Avg.Account payable. Years. 2005 2006 2007 2008 2009
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Ac ut aal c o npyb e t r oe u vr n
1 0 5 0 20 05 20 06 20 07 20 08 20 09 Ac ut c on pyb aal e t r oe u vr n
Interpretation: This ratio shows the portion of credit purchase to the accounts payable. It means that how many times we have paid our creditors in one year. So from the above computation it can be observed that it shows an increasing trend in five years. This tells that the firm is improving its position.
Average payment Period:
13. Average Payment period.
Formula.
Average Payment period=No. of days in a year/Account payable turnover
Items. Average Payment
Years. 2005 0 2006 126.85 2007 84.29 2008 46.85 2009 41.81
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period.
Interpretation: Average payment period tells that after how many days the firm pays its creditors.The greater the answer is the better it is for the firm .thus from the above computation it can be observed that average payment period is 0 in year 2005.while it has increased in year 2006 up to 126 days but again it has shown a decreasing trend in the next three years. Which shows that the firm is .
Inventory turnover:
9. Inventory turnover. Formula. Item. Inventory Turnover. 3 Inventory turnover=CGS/Average inventory Years. 2005 2.9 3.76 2.45 3.84 3.22
2006
2007
2008
2009
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I vnoy un vr ne t r T r o e.
5 4 3 2 1 0 20 05 20 06 20 07 20 08 20 09 I vnoy ne t r T r oe. un vr
Interpretation: This ratio reveals the number of times finished stock is turned over during a given accounting period. In other words this ratio indicates that how many times in a year inventory can be converted into sales. High inventory turnover ratio is better than a low ratio. According to graph above this ratio has increased from 2005 to 2006 but a slight decrease in 2007. In 2008 it has increased but in 2009 it has decreased again.
Average age of inventory:
10. Average age of inventory. Formula. Items. Avg. age of inventory. Average age of inventory=No. of days in year/Inventory turnover. Years. 2005 122.7 9
2006 95.7 8
2007 146.9 8
2008 93.8 4
2009 111.7 3
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Avg.age of Inventory.
200 150 100
6 20 07 20 08 20 09
Interpretation: This ratio shows us that for how many days the inventory remains with the company after its conversion from raw material and work in process to finished goods. The lower the days the higher the performance is for the firm. So, from the above graph it can be observed that in 2005 inventory turnover in days is 122.79 than it decreased in 2006 to 95.78 and increased in 2007 up to 146.98 and in 2008 it has again decreased to 93.84while it has again increased to 111.73.
Total Asset turnover:
11. Total Asset Turnover.
Formula. Total Asset turnover.
20 0
20 0
50 0
Avg.age of inventory.
5
Total Asset Turnover=Annual sales/Average total assets.
0.2930402
0.231914
0.1240643
0.2393786
0.42221267
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T tlAs t o a se t r oe u vr n .
0 . 5 0 . 4 0 . 3 0 . 2 0 . 1 0 Tt l o a As t se t r oe u vr n .
Gross Profit Margin:
14. Gross profit margin Formula Gross profit margin 36.91199645 Gross profit margin=Gross profit/sales*100 49.81158709 31.65270557 15.38866797 31.48721694
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Go spoi mr i r s r ft agn
6 0 5 0 4 0 3 0 2 0 1 0 0 20 05 20 06 20 07 20 08 20 09 Go s poit rs rf mr in ag
Interpretation:
This ratio indicates the efficiency of operations and firm pricing policies. It reflects the firm’s efficiency with which a firm produces its products. The ratio tends to rise whenever cost of goods sold decreases and gross profit rise and vice versa or when sales increases. The gross profit ratio of the company is increasing from 2005 to 2006 while it has decreased in 2007, 2008 but has again increased in 2009. This shows that the company’s sales are increasing and also company is reducing its cost of sales which ultimately increases the gross profit of the company. While in the last two years the company’s cost of sale has increased due to which its gross profit margin has decreased.
Operating profit margin:
15. Operating profit margin Formula. Operating profit margin Operating profit margin=operating profit /sales*100 45.93776754 49.13231012 34.30719084 12.11297995 18.75606386
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O eain p o itm r in prt g r f ag
6 0 5 0 4 0 3 0 2 0 1 0 0 20 05 20 06 20 07 20 08 20 09 O e ain poit prt g rf m r in ag
Interpretation:
This ratio indicates the firm’s profitability after taking account of all its operating expenses. The ratio tends to increase whenever operating expenses fall and operating income rise and fall when operating profit decrease or sales increases. The operating profit ratio of the company is showing a mix trend. It is increasing till year 2006, than there is a decline in the year 2007 and 2008. After that, ratio is depicting an increasing trend in 2009. The reason for decline in the year 2007 and 2008 is a rapid increase in the administrative and selling expenses.
Net Profit margin:
16.Net Profit margin Formula. Net profit margin 31.86019 Net profit margin=net profit /sales*100 30.39916 25.27361 0.42769 2.912257
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N t p ofit m rg . e r a in
3 5 3 0 2 5 2 0 1 5 1 0 5 0 5 20 05 20 6 0 20 07 20 08 20 09 Net p rofit m argin .
Interpretation
This ratio indicates the firm’s profitability after taking account of all interest expenses and income taxes etc. of the firm. The ratio tends to increase when net profit rises and decreased when net profit decrease or sales increase at higher rate than net profit. The range of ratio has shown a decreasing trend in last five years. The reason for decrease is that the net profit was decreased in that year. The reason for this decline in net profit is the addition of new expense namely, other operating expenses in the income statement of the company. Although provision for taxation was reduced but finance cost of the company had increased with the greater proportion, causing net profit to decline and hence reduced net profit ratio.
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Financial Analysis of D.G Khan Cement Company Ltd.
17. Earning Per Share Earning per share Earning available for common share holder/No of Formula. Earning Per Share 9.12 common share outstanding 10.37 6.43 (0.21) 1.96
ES P
1 2 1 0 8 6 4 2 0 2 20 05 20 06 20 07 20 08 20 09 E P S
Interpretation: The ratio tends to increase when earning available to common stock holders increase and falls when paid up capital increase or earning decreases. It has increased in 2006 as compared to 2005 but decreased in 2007 t0 2008 which is not good for the company. and it has again increased in 2009.
PriceEarning Ratio:
18. PriceEarning Ratio Formula Items PriceEarning Ratio=Market Price Per Share/Earning Per Share Years
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Market Price Per Share Earning Per Share 2
2005 59.65 9.1 7 6.5
2006 121.4 10.3 3 11.7 1
2007 6.4
2008
2009 13.31 1.9 6 6.7
(0.21)
PriceEarning Ratio
4


9
Price rning Ra io Ea t
14 0 .0 12 0 .0 10 0 .0 8 0 .0 6 0 .0 4 0 .0 2 0 .0 2 5 00 20 06 20 07 20 08 20 09 PriceEarn g in Ratio
Earning Yield Ratio:
19. Earning Yield Ratio Formula Item Earning Per Share Market Price Per Share 2 59.65 Earning Yield Ratio=Earning Per Share/Market Price Per Share Years 2005 2006 2007 2008 2009 9.1 10.3 6.4 1.9 7 121.4 3 (0.21) 6 13.31
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0.1 Earning Yeild Ratio 5 9
0.0 5
0.1
Ea n g Y ild Ra io r in e t
0 8 .1 0 6 .1 0 4 .1 0 2 .1 0 0 .1 0 8 .0 0 6 .0 0 4 .0 0 2 .0 20 05 20 06 20 07 20 08 20 09 Earn g Ye in ild Ratio
Dividend Payout Ratio:
Dividend Payout Ratio Formula Item
Dividend Per Share Earning Per Share
Dividend Payout Ratio=Dividend Per Share/Earning Per Share Years
2005 1.5 9.12 2006 1.5 10.37 2007 1.5 6.43 2008 (0.21) 2009 1.96
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Univariate Model
D.G Cement Univariate Model Item Cash flow/Total Debt Net Income/Total Asset Total debt/Total Asset 4 48.28 Years 2005 28.57 9.3 5 43.83 2006 27.87 7.0 4 34.44 2007 2.67 3.1 2008 (2.78) (0.10) 42.15 3 51.04 2009 5.26 1.2
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Financial Analysis of D.G Khan Cement Company Ltd.
Multivariate Model Z Score=.012X1+.014X2+.033X3+.006X4+.010X5 2005 X1=Working Capital/Total Assets X2=Retained Earning/Total Assets X3=Earning Before Interest and Taxes/Total Assets X4=Market Value of Equity/Book Value of Total Debts X5=Sales/Total Assets 6.33 1.54 13.46 642.73 29.30 2006 11.35 6.79 11.39 371.82 23.19 Years 2007 22.85 3.40 4.26 431.36 12.41 2008 13.75 0.10 2.90 350.82 23.94 2009 5.96 1.11 7.92 423.07 42.22
X1 X2 X3 X4 X5 Z Score=.012X1+.014X2+.033X3+.006X4+.010X5
0.0760 0.0216 0.4442 3.8563976 0.293 4.6912
0.1362 0.0951 0.3760 2.230946 0.232 3.0702
0.2742 0.0476 0.1405 2.588173 0.124 3.1745
0.164973 0.0014 0.0957 2.10491 0.239 2.6036
0.07155 0.0156 0.261329 2.538412 0.422 3.1660
National University Of Modern Languages
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Financial Analysis of D.G Khan Cement Company Ltd.
Interpretation: Formula
Z= 0.012(x1) +0.014(x2) +0.033(x3) +0.006(x4) +.099(x5)
Criteria Clear Non bankrupt score is: Z>2.99 Bankrupt score is: Z<2 Gray area is: Z between 2 and 2.99 The result of the Z score model of five years is as follows:
The result shows that firm is not Falling in Bankruptcy region in any year for the last five years so the company has strong Bankruptcy over the last five years.
National University Of Modern Languages
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Financial Analysis of D.G Khan Cement Company Ltd.
Conclusion
In the comparison of the company’s ratios with the industry’s ratios we have concluded that company’s liquidity ratios are good from 2005 to 2007 but in 2008 09 it is weak and activity ratios are consistent with the industry’s ratios but company’s financial and profitability ratios are decreasing which shows the firms operations and earnings are not good as compare to industry. In short we can say that company has not improved all those ratios with a higher percentage that a company should improve in relation to the industry’s ratios. This thing shows the firms better operations and managerial skills are not good for future prospects. This also shows company’s weak footings on which the firm is competing with others and losing its market share every year.
National University Of Modern Languages
Page 74
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